Doom and gloom for Social Security, but folks aren’t serious about a fix

The latest report out regarding the fiscal health of Social Security is out:

New congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037.
This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut.Read more: Social Security fund will be drained by 2037

The problem is, agreement on a fix is a hard thing to pin down. Democrats want to fix the problem by simply eliminating the top end contribution cap. Currently, 6.2% of an earner’s income is deducted for Social Security until that person reaches $106,000 in income. Republicans (as well as members of the Debt Commission) recommend increasing the retirement age for future beneficiaries. Previous proposals from Conservatives involved privatization of a portion of Social Security. The concept had promise–an individual would have the choice (emphasize choice to put 3% of their Social Security contribution into a private account–but it never gained traction with the American population, due in no small part to the left painting a picture of a poor individual losing their entire Social Security account to a market crash or due to some unscrupulous bankers.
Even with the warning sounded of rough seas ahead for Social Security, I predict finding common ground between the two parties on the issue will be difficult. As it stands, the Social Security trust fund is nothing more than a myth, a figurative box of IOUs from the government to the tune of $2.5 trillion. And since the government is already borrowing money (to the record tune of $1.5 trillion projected in 2011), paying those back will be challenging.
President Obama stated in his State of the Union Address that he wanted “strengthen the program while protecting current retirees, future retirees and people with disabilities,” which seems to translate to “find some more money from somewhere but don’t touch benefits.” With ideas like that, it’s no wonder there are countless Americans who figure the return on investment made into Social Security from their paychecks will end up being a big fat zero.